Reg BI Lands in Top 15 of Customer Disputes in FINRA Arbitration

Posted on July 22nd, 2022 at 12:52 PM

From the Desk of Jim Eccleston at Eccleston Law:

After taking effect nearly two years ago, Regulation Best Interest (Reg BI) has entered the top 15 of FINRA arbitration claims. 

Reg BI now ranks 14th on the list of top dispute types for client arbitration, according to FINRA Dispute Resolution. Reg BI, a rule that imposes a new broker-dealer standard of conduct, was approved by the SEC in June 2019 and was subsequently implemented in June 2020. FINRA regulators primarily are responsible for conducting examinations and monitoring whether financial services firms are complying with the rule. 

Since Reg BI in some respects has replaced the previous suitability rule, the regulation has introduced a new cause of action in FINRA arbitration claims. While there were 330 suitability disputes in FINRA arbitration this year through May, industry experts anticipate that the number of Reg BI claims eventually will catch up. The top dispute in FINRA arbitration is breach of fiduciary duty, which has been alleged in 485 cases this year. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory, arbitration and disciplinary matters.


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